China firms come to rescue of Malaysia’s scandal-hit 1MDB

China’s interest in 1MDB comes as no surprise. A year ago, the Financial Times reported that China and Malaysia were in talks to rescue the fund, which is the focus of official investigations in several countries including the US over accusations that Malaysia’s Prime Minister Najib Razak channelled over 2.67 billion ringgit (nearly US$700 million) from 1MDB into his personal bank accounts. 
Najib is acknowledged to be “Malaysian Official 1” named in the US Department of Justice lawsuit to seize assets it says were bought with more than $3.5 billion stolen from 1MDB.
Straits Times reports that 1MDB repaid the loan last Friday by selling stakes in two 1MDB-related entities that held land in northern Penang and around Port Klang.
“Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by ‘concerns ultimately controlled by Chinese state-owned enterprises’.” read the report. 
1MDB said it acquired 234 acres of prime land in Ayer Itam, Penang for RM1.38 billion in 2013. Over in Selangor, 1MDB acquired a 310-acre piece of land near the Port Klang Free Zone in 2014. Plans to develop the two parcels of land fell apart thanks to massive cash-flow problems after the fund ran up RM42 billion ($11.73 billion) of debts.
China already has a substantial stake in 1MDB-linked asset Edra Global Energy and is eyeing projects in the formerly 1MDB-owned Bandar Malaysia, reports Malaysiakini.
The 1MDB development fund was established in 2009, soon after Najib took office.